Retail industry

World will catch a cold if Japan gets pneumonia

Article Abstract:

The strength of stock markets across the world may be negatively affected if the current decline in the Japanese stock market continues, according to some observers. There could be an end to large capital outflows from Japan, having a particularly negative impact on the US and the UK. However, it must be remembered that the differential between US and Japanese bond yields is still very high at around 4% a year, and that yield remains extremely attractive to Japanese financial institutions. The drying up of capital outflow would prompt the Bank of Japan to enter the market.

Capital reasons for extra public investment

Article Abstract:

The UK's investment performance is considerably stronger than that of many other countries, according to a recent government paper on the state of capital investment in the UK economy. The share of business investment in GDP is reasonable by international standards, and capital spending fell by less than usual during the recession. Research has indicated that higher investment is linked with higher output growth in both developing and industrialised countries.